The Department of National Defence is implementing Capability-Based Planning as a core element in the overall business process. In this context, the Collaborative Capability Definition, Engineering, and Management (CapDEM) Technology Demonstration Project examine the Collaborative Engineering concept to create a systematic link between the conceptualization of a capability and the detailed definition, engineering and management of the component systems. The current report summarises the initial work conducted, from April 2003 to December 2003, by the CapDEM team responsible to work out the Capability Engineering Process (CEP). It describes the main findings about scoping and applying the future Canadian CEP.